The likelihood of a major offshore accident
in European waters remains unacceptably high. With a stringent safety
regime it is possible to bring the risk of such an accident down to the
absolute minimum. Damage done to the environment and coastal economies
can be significantly reduced if an effective emergency response plan is
put in place beforehand. This is why the European Commission has
proposed today a new law which will ensure that European offshore oil
and gas production will respect the world's highest safety, health and
environmental standards everywhere in the EU.

Energy
Commissioner Günther Oettinger said: "Today, most oil and gas in Europe
is produced offshore, often in harsh geographical and geological
conditions. Given our growing energy demand, we will need all the oil
and gas from beneath our seas. But we need to prevent accidents like
Deepwater Horizon in the Gulf of Mexico from happening. Securing best
industry practices in all our offshore operations is an undisputable
must. Today's proposal is a crucial step forward towards safer offshore
activities to the benefit of our citizens and our environment".

Environment Commissioner Janez Potočnik said: "We
have learnt our lessons from last year's Deepwater Horizon accident.
Today's proposed regulation will help us prevent such future crises from
happening in all marine waters which fall under EU Member States'
jurisdiction. This safety update is good news for the environment, but
it's also good news for business which will be able to deploy its
operations in a predictable framework. There is ample evidence from past
accidents that prevention is better than cure."

The
new draft regulation sets clear rules that cover the whole lifecycle of
all exploration and production activities from design to the final
removal of an oil or gas installation. Under the control of the National
regulatory authorities, European industry will have to assess and
further improve safety standards for offshore operations on a regular
basis. This new approach will lead to a European risk assessment that
upgrades continuously by taking into account new technology, new
know-how and new risks. It introduces requirements for effective
prevention and response of a major accident:

Licensing
The licensing authorities in the Member States will have to make sure
that only operators with sufficient technical and financial capacities
necessary to control the safety of offshore activities and environmental
protection are allowed to explore for, and produce oil and gas in EU
waters.

Independent verifiers
The technical solutions presented by the operator that are critical for
safety on the installation need to be verified by an independent third
party prior to and periodically after the installation starts into
operation.

Obligatory ex ante emergency planning
Companies will have to prepare a Major Hazard Report for their
installation, containing a risk assessment and an emergency response
plan before exploration or production begins. These reports will need to
be submitted to national authorities who will give a go-ahead if
satisfied.

Inspections
Independent national Competent Authorities responsible for the safety
of installations, who will verify the provisions for safety,
environmental protection and emergency preparedness of rigs and
platforms and the operations conducted on them. If an operator does not
respect the minimum standards, the competent authority will take
enforcement action and/or impose penalties; ultimately, the operator
will have to stop his drilling or production operations if he fails to
comply.

Transparency
Comparable information will be made available to citizens about the
standards of performance of the industry and the activities of the
national competent authorities. This will be published on their
websites.

EmergencyResponse
Companies will prepare emergency response plans based on their rig or
platform risk assessments and keep resources at hand to be able to put
them into operation when necessary. Member States will likewise take
full account of these plans when they compile national emergency plans.
The plans will be periodically tested by the industry and national
authorities.

LiabilityOil
and gas companies will be fully liable for environmental damages caused
to the protected marine species and natural habitat. For damage to
waters, the geographical zone will be extended to
cover all EU marine waters including the exclusive economic zone (up to
about 370 km from the coast) and the continental shelf where the
coastal Member State exercises jurisdiction. For water damage, the
present EU legal framework for environmental liability is restricted to
territorial waters (about 22 km offshore).

International The
Commission will work with its international partners to promote the
implementation of highest safety standards across the world.

EU Offshore Authorities Group Offshore
inspectors of Member States will work together to ensure effective
sharing of best practices and contribute to developing and improving
safety standards.

Background

Oil
and gas have been extracted from beneath the seabed in Europe since the
1970s. Today, over 90% of oil and over 60% of gas produced in the EU
and Norway comes from offshore operations. There are more than 1000
offshore oil or gas installations in operation in European waters.
Whilst most production is from the North Sea region, and most of the oil
come from the UK and Norway, interest is developing throughout the EU
offshore provinces and 13 Member States (UK, the Netherlands, Denmark,
Germany, Ireland, Italy, Spain, Greece, Romania, Bulgaria, Poland, Malta
and Cyprus) have awarded offshore oil and gas licences.

The
offshore industry in different Member States operates to different
environmental, health and safety standards. To date EU legislation does
not cover all the aspects of the offshore oil and gas industry and
national legislation is very different between Member States. Despite
action by some Member States to reform their systems after disasters in
the North Sea in the 1980s there is still a significant risk of severe
accidents in the EU. Past events show that at least 14 major offshore
disasters – such as well blow-outs and total loss of production
platforms - have occurred around the world in the last 30 years, 5 of
them in the last 10 years. Possible consequences of a major accident are
extreme. They include loss of lives, major environmental damage, and
collateral damage to coastal and marine livelihoods. In financial terms,
as we have seen, an event on the scale of the Gulf of Mexico disaster
can cause damages of Euro 30 billion.

In conjunction to this legislative proposal, the Commission is putting forward a proposal for the EU to accede to a
Protocol of the Barcelona Convention that protects the Mediterranean
against pollution from offshore exploration and exploitation activities
(see IP/11/1261).